Estate duty exemption for cash gifts turns on proving donor's continued benefit and identity of redeposited funds.

Section 10 of the Estate Duty Act, 1953 applies to cash gifts only if the donee immediately assumes possession and enjoyment and retains it to the entire exclusion of the donor. In proving that the exemption is displaced, the Revenue must establish by cogent evidence not only the donor's continued benefit, but also the identity of the gifted cash with any later redeposited amount. Mere proof that equivalent sums were later deposited with the donor is insufficient unless the particular gifted money is linked to the redeposit and the absence of other funds with the donee is shown. On that reasoning, the burden under section 10 was not discharged and the provision was held inapplicable.

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Issues: Whether the cash gifts made by the deceased could be brought to estate duty under section 10 of the Estate Duty Act, 1953, when the Revenue failed to prove that the donees had not immediately assumed possession and enjoyment of the gifted amounts and that the same gifted amounts were later redeposited with the donor.

Analysis: Section 10 applies only when both cumulative requirements are satisfied: the donee must bona fide assume possession and enjoyment of the gifted property immediately on the gift, and must retain such possession and enjoyment to the entire exclusion of the donor. In the case of cash gifts, mere proof that equivalent sums were later deposited with the donor is insufficient unless the identity of the gifted money and the redeposited money is established. The Revenue did not prove that the particular amounts gifted were the amounts redeposited, nor did it establish the absence of other funds with the donees. The burden to displace the exemption under section 10 was therefore not discharged.

Conclusion: Section 10 of the Estate Duty Act, 1953 was not attracted. The question was answered in the affirmative, against the Revenue and in favour of the assessee.

Ratio Decidendi: For section 10 of the Estate Duty Act, 1953 to apply to cash gifts, the Revenue must prove by cogent evidence both the donor's continued benefit and the identity of the gifted cash with the amount later returned or redeposited by the donee.

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